Crypto is not = Cash currency for IRS reporting

The IRS released Announcement 2024-4, providing transitional guidance under section 6050I with respect to reporting transactions involving the receipt of digital currency.

Generally, when receiving more than $10,000, IRS reporting is required.

The announcement clarifies that, at this time, digital assets are not required to be included when determining whether cash received in a single transaction (or two or more related transactions) meets the reporting threshold. The U.S. Department of the Treasury and IRS, however, intend to prescribe regulations to provide additional information and procedures for reporting the receipt of digital assets under section 6050I.

Until the Treasury and the IRS publish regulations under section 6050I to implement section 80603(b)(3) of the “Infrastructure Investment and Jobs Act” (Pub. L. No 117-58):

• Persons engaged in a trade or business who, in the course of that trade or business, receive digital assets or digital assets and other cash in one transaction (or two or more related transactions) will not be required to include those digital assets when determining whether cash received has a value over the $10,000 reporting threshold for purposes of determining if reporting is required under section 6050I with respect to those transactions.
• Persons engaged in a trade or business who, during that trade or business, receive cash (other than digital assets) over $10,000 in one transaction (or two or more related transactions) must continue to file an information return under section 6050I for that cash received.

It is very possible that digital currency may be deemed a cash equivalent in the future. But for now, no reporting is required.

See IRS release—IR-2024-12 (January 16, 2024).

Patel Law Offices offers a strategy session to discuss how to resolve your legal problem. Conveniently schedule online today with our online scheduler and questionnaire.